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U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
U S  C G
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U S C G

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  • 1. CG in USA
  • 2. Core Policies <ul><li>All Directors elected annually by confidential ballots (votes by shareholders) counted by independent tabulators </li></ul><ul><li>2/3 rd of a corporation’s Directors should be independent. (only connection is Directorship) </li></ul><ul><li>Corporations should disclose required information to the shareholders to ascertain if the Director is really independent </li></ul><ul><li>Corporations should have audit, nominating and compensation committees </li></ul>
  • 3. Core Policies <ul><li>A majority vote of common shares outstanding should be required to approve major decisions concerning pledge or sale of corporate assets which have a material effect on shareholder value. </li></ul><ul><li>Council of Institutional Investors – CG Policies establish goals and guidelines of publicly traded corporations. </li></ul>
  • 4. General Principles <ul><li>Share holding voter rights </li></ul><ul><li>Each share should have 1 vote </li></ul><ul><li>Allowed to vote on unrelated issues individually </li></ul><ul><li>A majority vote should be sufficient to amend company by laws </li></ul><ul><li>Majority vote of common shares enough for important corporate decisions like buyback, change in ownership of 20% or more of the assets, ESOP introduction, compensation for employees, going for debt etc. </li></ul>
  • 5. <ul><li>Share holder meeting rights </li></ul><ul><li>Time and location of meeting should take into account shareholders expense and convenience </li></ul><ul><li>Appropriate notice of meetings should be given so that shareholders can exercise their franchise </li></ul><ul><li>All Directors should attend the meetings and answer shareholder questions if any. </li></ul><ul><li>Corporations should not adjourn a meeting just for the lack of votes on a item. </li></ul><ul><li>Remote shareholder meetings only as a supplement to the in person meetings </li></ul><ul><li>Shareholders rights to call a meeting are fundamental and corporations cannot deny such meetings if permitted by state laws or by corporation’s article of incorporations </li></ul>
  • 6. Board’s Accountability to shareholders <ul><li>Former Directors cannot be given the powers to act on behalf of the co. </li></ul><ul><li>Board should take action on shareholder proposals that receive a majority no. of votes </li></ul><ul><li>Directors should respond to communications from shareholders and should seek their views on governance, management and performance </li></ul><ul><li>The Board should disclose individual attendance figures of every Director at committee/board meetings </li></ul>
  • 7. <ul><li>Director and Management Compensation </li></ul><ul><li>Annual approval required from a majority of the Directors for CEO compensation </li></ul><ul><li>Directors should be compensated only in cash or stock </li></ul><ul><li>Board should award CEO no more than one form of equity compensation </li></ul><ul><li>Companies should take all the above as expenses in their income statements </li></ul><ul><li>Any changes in the above patterns of compensation should be reported in the annual statements. </li></ul>
  • 8. <ul><li>Positions </li></ul><ul><li>An action should not be taken if it is to reduce its accountability to shareholders </li></ul><ul><li>CG policies should serve to enhance equal treatment for shareholders </li></ul><ul><li>Shareholders should have meaningful ability to participate in major decisions that affect corporate viability. </li></ul><ul><li>Shareholders should have meaningful ability to nominate director candidates and also for processes for their selection and evaluation </li></ul><ul><li>Directors who attend less than 75% of meetings for 2 consecutive years should not be re-nominated </li></ul><ul><li>The Board should evaluate itself and its members on a continual basis. It should comprise of members having a diverse set of skills, background, experiences, ages, races and genders appropriate to the company’s on going needs. </li></ul>
  • 9. Board Size and Service <ul><li>Neither too small nor too large to be efficiently functional. No less than 5 members or no more than 15 members. Shareholders should be allowed to vote for any major change in Board size. </li></ul><ul><li>Co. should specify guidelines as to how many Board memberships can be taken by a Director. </li></ul><ul><li>In any case not more than 5 for profit company Boards </li></ul>
  • 10. Board Meetings &amp; Operations <ul><li>Meaningful information in a timely manner to Directors prior to Board meetings </li></ul><ul><li>Directors to be allowed to place items on Board agendas. </li></ul><ul><li>Directors to receive training from independent sources on their responsibilities and not rely exclusively on information provided by the CEO </li></ul><ul><li>The Board should hold regularly executive sessions without CEO or staff present. </li></ul><ul><li>The Board should approve and maintain a CEO succession plan. </li></ul>
  • 11. Auditor independence policy <ul><li>Should not perform any non-audit services for its clients with exceptions. </li></ul><ul><li>The Board or audit committee should seek competitive bids at least every five years. </li></ul><ul><li>The audit committee should comprise of independent Directors alone. </li></ul><ul><li>Auditor independence policy to be disclosed. </li></ul>
  • 12. Compensation <ul><li>Pay for Directors and managers should be indexed to peer or market. </li></ul>
  • 13. Thank You

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